If your small business had a net operating loss (NOL) in 2008, (your expenses exceeded your income), under the American Recovery and Reinvestment Act (ARRA), enacted in February, you may choose to carry the resulting loss back for up to five years, instead of the usual two. You may be able to carry that loss as far back as tax-year 2003, rather than the usual 2006. This could mean a special tax refund or a larger refund because the loss is being spread over as many as five tax years, rather than just two.
If your small business suffered a large loss in 2008, you may be able to:
* Offset the loss against income earned in up to five prior tax years,
* Get a refund on taxes paid up to five years ago,
* Use up part or all of the loss now, rather than wait to claim it on future tax returns.
If your small business qualifies as an eligible small business (ESB) that has no more than an average of $15 million in gross receipts over a three-year period ending with the tax year of the NOL then you may make this choice for the sole tax year.
You must file a claim by Sept. 15, 2009.